If the allocation between the parties is to be done only to offset the costs, it is not possible to pay taxes such as: The main feature of the cost-sharing agreement is that the costs are simply reimbursed. This is because these costs are only distributed between the parties, as the parent company does not provide services to benefit from such activities. We believe that the Brazilian tax authorities are not entitled to tax transfers sent abroad as part of a cost-sharing agreement with non-resident companies, since “in a cost-sharing and expense-sharing contract signed between companies of the same economic group with the participation of residents and non-residents in the country , activities that are made available to the resident corporation by a non-resident corporation must be registered with Siscoserv. if the activity in question is planned in the NBS. This is a transaction involving a transaction that results in a change in the equity of the corporation, provided that the repayment offered in return for the activity is a charge that necessarily involves a change in equity. Under the cost-cutting agreement, there is a subcontracting of certain services by the centralizing corporation for the benefit of other members, the resulting mandatory relationship being the character of an authentic service delivery, the third party mandated being the service provider and the legal persons of the group as policyholders who actually benefit from the services. Where the supplier is established or resides abroad, the registration of information about Siscoserv is mandatory to be carried out by an insurance taker based in Brazil. When services are provided by the entity (or the export or receptive component) as a key element of its business, OECD and U.S. rules state that a certain level of profit is appropriate for the service provider component.  Canadian rules do not permit such a profit. [Citation required] Price review in such cases generally follows one of the methods described above for products. In particular, the cost-plus method may be preferred by tax authorities and taxpayers because of simple management.
The rules for services expand the cost-plus and offer an additional option to reduce these data problems.  Fees charged to related parties for services that do not operate in the main activity of the tested party or in the group of related persons are refractoryly considered arm length when calculated at a cost of thought plus zero (service cost method). These services may include return operations (for example. B accounting and data processing services for groups that are not involved in providing such services to customers), product testing or many of these non-integral services. This method is not permitted for production, resale and certain other services that are generally an integral part of a business. iii) ISS – because there is no service delivery, because there is no price that includes costs and value as a profit margin. In essence, hiring a third party abroad is not neglected, since there is always only a simple division by reimbursement of costs of common interest or common interest.